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Math Help - Compound Interest for Continuous compounding

  1. #1
    Junior Member
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    Compound Interest for Continuous compounding

    I know how to find C.I but how does one find it for "Compounding Continuously"??

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  2. #2
    MHF Contributor
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    This is where one of the most important numbers of modern mathematics comes in - e.

    e=\lim_{x\rightarrow\infty}(1+\frac{1}{x})^x

    And when compounding continuous interest the formula is:

    A=Pe^{rt}

    where A is the new amount, P is the principal amount, e is a constant, r is the growth rate, and t is time.
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